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8/11/2019 Changing Environment Ppt
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CONTEMPORARY
MANAGEMENT
Prof. Naik
MET IOM
Session 2 Changing Environment of Management
8/11/2019 Changing Environment Ppt
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Content Outline
9/22/2014 Prof. Naik 2
Influencing Forces
External Environment
Direct Forces
Indirect Forces
Internal Environment
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You will learn about:
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Objectives
Analyze the impact of the internal forces of organization
on managerial performance/functions
Identify the effects of the external forces of organization
on managerial performance/functions
Investigate the various trends in Human Resources
affecting the management of an organization
At the end of this session, you will be able to:
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9/22/2014 Prof. Naik 3
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CHANGING
ENVIRONMENT OF
MANAGEMENT
Prof. Naik
MET IOM
8/11/2019 Changing Environment Ppt
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Changing Environment
An organization's ability to learn, and translate thatlearning into action rapidly, is the ultimate competitiveadvantage.
Globalization has changed us into a company thatsearches the world, not just to sell or to source, but to findintellectual capital - the world's best talents and greatestideas.
Strong managers who make tough decisionsto cut jobs provide the only true job security
in today's world. Weak managers are the
problem. Weak managers destroy jobs.
What is the change?
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9/22/2014 Prof. Naik 5
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Forces
Objective: To identify the external and internal forcesaffecting
an organization
Task: Choose a group leader for your group
The group leader will present the points aboutthe external and internal forces discussed in the two
articles given you’ll in the earlier class
Time: Each group- 5 mins
Get Ready Discussion
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Managers and EnvironmentImportance of Knowing the Environment
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The managers job cannot be accomplished in avacuum within the organization.
There are a number of factors both internal aswell as external which jointly affect managerialdecision-making.
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Important for the manager to understand and evaluatethe impact of the business environment due to thefollowing reasons :
1. Businesses may be doomed or be non starters due torestrictive business environment
Examples:
Rigid government laws ( no polluting industry can everbe located in around 50 Km radius of the Taj) ,
State of competition ( Car manufacturing capacitypresently in the country is far in excess of demand)
etc.
Managers and EnvironmentImportance of Knowing the Environment
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Managers and EnvironmentImportance of Knowing the Environment
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Important for the manager to understand and evaluatethe impact of the business environment due to thefollowing reasons :
2. The present and future viability of an enterprise isimpacted by the environment
Example:
No TV manufacturer can be expected to survive bymaking only B&W television sets when consumerpreference has clearly shifted to colour television sets.
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Managers and EnvironmentImportance of Knowing the Environment
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Important for the manager to understand and evaluatethe impact of the business environment due to thefollowing reasons :
3. The cost of capital and the cost of borrowing - two keyfinancial drivers of any enterprise are impacted by theexternal environment.
Example:The ability of a business to fund its expansion plan byraising money from the stock markets depends on theprevalent public mood towards investment in stockmarkets.
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Managers and EnvironmentImportance of Knowing the Environment
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Important for the manager to understand and evaluatethe impact of the business environment due to thefollowing reasons :
4. The availability of all key inputs like skilled labour ,trained managers , raw materials , electricity ,transportation , fuel etc are a factor of the businessenvironment.
Example:
Mahindra and Mahindra- Igatpuri Plant- Unhealthywork culture, Long production cycle
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M d E i t
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Managers and EnvironmentImportance of Knowing the Environment
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Important for the manager to understand and evaluatethe impact of the business environment due to thefollowing reasons :
5. Increasing public awareness of the negative aspects ofcertain industries
Example:
Hand woven carpets (use of child labour) ,Pesticides (damage to environment in the form ofchemical residues in groundwater),
Plastic bags (choking of sewer lines) have resulted in
the slow decline of some industries.
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M d E i t
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Managers and EnvironmentImportance of Knowing the Environment
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Important for the manager to understand and evaluatethe impact of the business environment due to thefollowing reasons :
6. The environment offers the opportunities for growthand profits .
Example:
When the insurance and aviation industry was thrownopen to the private sector , the new entrant couldeasily build on the expectations of the public- Low Cost
Airlines.
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M d E i t
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Forces influence managerialperformance/functions
Managers and EnvironmentInfluencing Factors
External
Internal
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I t l E i t
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Internal Environment
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Which Forces are these?
Objective: To identify the forces in the internal environmentaffecting the performance of Managers
Task: Brainstorm about the forces within anyorganization you are familiar with
Time: 10 mins
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E t l E i t
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External Environment
Includes all the forces acting on theorganization from the outside
Direct Forces
Indirect Forces
Which Forces are these?
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E t l E i t
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Direct Forces
External Environment
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The
Managerand the
organiza-
tion
Customers:
Present and
Future
Competitors
•Intratype
•Intertype
Suppliers
•Raw
materials
•Funds
•Energy
•Equipment
Human
Resources
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E t l E i t
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Customers (Present & Future)
Most Vital direct force
Most important job- find a customer (Peter Ducker)
Preferences-may change Complaint books
Telephone enquires
Individual difference (differ in age, sex, income)
Organisations (service, quality, delivery)
Direct Forces
External Environment
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E t l E i t
8/11/2019 Changing Environment Ppt
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Competitors
Organization’s opponents, the companies against which
the organization competes for customers and needed
resources in the external environment
Intra type :
Produce same/similar type of products/ services,
e.g. Acer and Dell
Maruti Suzuki and Tata Motor Company
Air India and Kingfisher Airlines
IIM and MET
Direct Forces
External Environment
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E t l E i t
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Competitors
Organization’s opponents, the organisations against
which the organization competes for customers and
needed resources in the external environment
Inter type :
Distinctly different and competing organizations
e.g. Birla Sun Life Financial Services and HDFC
Mutual Funds
Hewlett-Packard Company and Microsoft
Corporation compete against the Indian Naval
forces for talented computer software
programmers
Direct Forces
External Environment
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E ternal En ironment
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Suppliers
Resource Suppliers
Funds
Energy
Equipment
ServicesMaterials
Direct Forces
External Environment
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to
produce
External Environment
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Human Resources- Recent Trends
Cultural/ Social Diversity
Managers have to balance wants,needs, perceptions,
attitudesUrban/Rural Educated
Own values, Cultures
Direct Forces
External Environment
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External Environment
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Human Resources- Recent Trends
Cultural/ Social Diversity
Direct Forces
External Environment
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Diversity
Race and
Ethnicity
Country
of Birth
Country
of Birth
Age
Gender
Economic
Backgroun
dEducation
Backgroun
d
Skill Level
Sexualpreference
Religious
Affiliation
Experienc
e
External Environment
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Human Resources- Recent Trends
Downsizing/outsourcing
Jobs being phased out
Loyalty to company is weakening
Anxiety- Low trust
Low job security has created not closer but arms length
relations between manager & workers
Direct Forces
External Environment
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External Environment
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Human Resources- Recent Trends
Flexitime- Flexible Working Hours
Workplace flexibility
Direct Forces
External Environment
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External Environment
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Human Resources- Recent Trends
WOMEN in Workforce
Direct Forces
External Environment
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External Environment
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Let’s Debate
External Environment
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Objective: To analyze the changing trend of women inworkforce
Task: WOMEN are hidden engine of WORLDGROWTH
Debate about:WOMEN and Management- in positions of
Power
Does it affect the working of an organization?
Time: 20 mins
External Environment
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Direct Forces
External Environment
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Indra Nooyi
CEO Pepsico
Neelam Dhawan
Managing Director,
Microsoft India
Chanda Kocchar
Deputy Managing
Director of ICICI
Bank Limited
Mallika Srinivasan
CEO of Chennai, India-
based Tractors and Farm
Equipment (Tafe),
Shobhana Bharatiya
Vice-Chairperson and EditorialDirector of the Hindustan Times group
External Environment
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May affect managers in 2 ways :
(1) Outside organizations
Direct influence on an organization or an indirect
influence through a direct force.Example: Times of India campaign against Corruption
(2) Inside organizations
Influence climate in which organization must work
Example: Economy-contracts or expands organization
Indirect Forces
External Environment
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External Environment
8/11/2019 Changing Environment Ppt
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Indirect Forces
External Environment
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The
Managerand the
organiza-
tion
Customers:
Present and
Future
Competitors
•Intratype
•Intertype
Suppliers
•Raw
materials
•Funds
•Energy
•Equipment
Human
Resources
Inter
national
Economic
Political,
Legal
regulatory
Cultural and Social
Technological
The
Managerand the
organiza-
tion
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External Environment
8/11/2019 Changing Environment Ppt
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Indirect Forces
External Environment
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Economic:
Interest rates,
Funds from capital marketing
Recession
Technological:
Power of computer system in the organisation
Ultra sound treatment in hospitals
Political, Legal & Regulatory:
Minimum wages Act
Pollution Control
External Environment
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Indirect Forces
External Environment
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Cultural & Social:
Festivals
Pitrupaksh
Drinking/ smoking due to peer pressure
International/ Global:
MNC’S entering Indian Markets
Indian organisations going abroad
Internal Environment
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Internal Environment
Day to day forces within the organization setting in
which Manager works and carries on activities
Skill requirements & role performance are importantforces for the manager in the internal environment.
Levels in management-Three levels(seen earlier)
Managerial Roles and Skills(We will see later)
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Which Forces are these?
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Recap
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Recap
Changing environment of Management and the
affecting Forces
Internal Forces
External Forces
Direct
Indirect
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9/22/2014 Prof. Naik 34
In today’s session we discussed about:
Assignment
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Objective: To identify forces affecting environment an organization
Task: Analyze the recent case of Air-India Strike1. Which forces affected the working environment of Air
India
2. Who all were affected by the decisions3. What role did management play in this case4. What were the problems raised5. How was the case sorted out and what were the
solutions6. In your opinion did the management take correct steps.
Justify
Assignment
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9/22/2014 Prof. Naik 35
In today’s session we discussed about:
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